The National Thermal Power Corporation (NTPC) has auctioned 100 MW solar projects under the domestic content requirement (DCR) category at the Pavagada solar park in Tumkur, Karnataka. The winning projects of 50 MW each will be developed under National Solar Mission (NSM), Phase-II, Batch-II, Tranche-I. The auction is part of NTPC’s target of installing 3,000 MW solar projects under State Specific Bundling Program.

An NTPC official confirmed the successful completion of the auction. When asked whether NTPC faced problems auctioning DCR category projects as seen elsewhere, he stated that NTPC projects are considered more viable by the developers so there was no dearth of bidders. Overall four companies participated in the auction out of which Tata Power and Adani Green Energy (through its subsidiary Parampujya Solar Energy) won the bids. Previous DCR auctions have had muted interest as these projects tend to be more expensive.

Sources at the Ministry of New and Renewable Energy (MNRE) said that the Government of India has not yet implemented any changes relating to the DCR category to adhere to the final World Trade Organization (WTO) ruling, which is why we continue to see the DCR category included in auctions and tenders. This will stop once a directive from Government of India is published in the Gazette of India.

According to NTPC, Adani Green Energy had bid to develop the entire 100 MW capacity, but Tata Power ended up winning 50 MW by quoting a tariff of Rs.4.84 (~$0.07208)/kWh, lower than Adani’s Rs.4.86 (~$0.07238)/kWh bid.

An official at the MNRE confirmed that Tata Power’s bid was the lowest by any developer involved in installing DCR category projects. The previous lowest bid was Rs.5.06 (~$0.07536)/kWh by Janardan Wind Energy, which won two projects of 10 MW each in Rajasthan, also in an NTPC auction.

According to Raj Prabhu, CEO of Mercom Capital Group, the slight drop in tariff of 4 percent in the tariff quoted can be attributed to the increase in project size and the benefits of scale and continued drop in component costs. NTPC had previously auctioned 300 MW solar capacity under DCR category for this batch. With the auctioning of 100 MW capacity, NTPC has auctioned a total of 400 MW of solar under DCR category in total.

Image credit: http://www.ntpc.co.in/en

Sampath has been part of the Mercom India research and news team since the company’s inception. He currently oversees all data and research relating to news published on the MercomIndia.com platform. Sampath received his Bachelor’s of Commerce Degree from Kuvempu University and Post Graduate Diploma in Management, from Indira Gandhi National Open University. More articles from Sampath Krishna.